Commercial Litigation Update

As we previously reported, Judge Bough of the U.S. District Court for the Western District of Missouri denied an insurance carrier’s motion for summary judgment in K.C. Hopps Ltd. v. The Cincinnati Ins. Co. Inc., No. 20-cv-00437-SRB (W.D. Mo. Sept. 21, 2021) and sent the case to trial.

On October 28, after a three day trial, the jury returned a verdict in favor of the insurer. The case involved claims by a group of restaurants under their insurance policies’ business income (and extra expense) coverage form. Under that coverage, the insurer is obligated to pay for the insured’s ...

Although insurers largely have continued to have success in federal court defeating COVID-19 business interruption lawsuits, one judge – Judge Stephen Bough of the United States District Court for the Western District of Missouri – continues to be pro-policyholder. As we previously reported, last year he refused to dismiss several suits brought by policyholders seeking business interruption coverage for COVID-19 related losses.

Last week, in K.C. Hopps Ltd. v. The Cincinnati Ins. Co. Inc., No. 20-cv-00437-SRB (W.D. Mo. Sept. 21, 2021), Judge Bough gave policyholders ...

As we have written here previously, businesses across the country have brought lawsuits against their insurers seeking coverage for losses related to COVID-19. According to the COVID Coverage Litigation Tracker at the University of Pennsylvania Carey Law School, over 1,500 suits have been filed since March 2020 in state and federal court. Some interesting statistics based on that information:

• Over one third of the cases have been filed by food services establishments.
• Almost one quarter of the cases were brought as class actions.
• Approximately one third of the cases involved ...

Following up on our prior discussion of Studio 417, Inc., et al. v. The Cincinnati Ins. Comp., a different federal judge in the Western District of Missouri recently ruled in Zwillo V, Corp. v. Lexington Insurance Co. that a Kansas City restaurant could not recover for COVID-19 business interruption losses under an insurance policy and, in the process, questioned the reasoning of Studio 417, Inc. and other recent decisions.

The owner of a restaurant in Kansas City (the “Insured”), purchased a commercial property insurance policy from Lexington Insurance Company (the ...

Following up on our recent post about a business interruption insurance decision by a Washington D.C. court, a federal judge in Missouri ruled last month, in Studio 417, Inc., et al. v. The Cincinnati Ins. Comp., No. 20-cv-03127-SRB, that businesses can sue their insurance carrier for business interruption losses caused by COVID-19.

Plaintiffs, owners of a hair salon and various restaurants (the “Insureds”) purchased an all risks policy from Cincinnati Insurance Company (the “Insurer”). As a result of losses sustained due to COVID-19, the Insureds sought business ...

On March 23, 2020, shortly after the Governors of California, New York, Connecticut and New Jersey issued orders closing non-essential businesses, we recommended that businesses review their insurance policies to determine if they had either business interruption coverage or civil authority coverage that might be available to lessen the economic blow of COVID-19.  As explained here, business interruption coverage generally allows a business to recover certain  losses in the event that the business suffers physical damage or loss that prevents it from operating its business ...

The COVID-19 pandemic has leveled a blow against businesses everywhere. The Governors of New York, California, Illinois, and Pennsylvania, for example, have ordered all non-essential businesses to close their physical locations and the California Governor has ordered all residents, except those performing essential functions, to stay home. Governors across the country have issued orders restricting various business activities. The trend is likely to continue in the coming weeks and to adversely impact the bottom line of many businesses.

Some businesses, however, may have ...